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It starts badly. Bad weather delays our flight by three hours and we don’t arrive in Split till around midnight and then face a two-hour drive to Zadar. We finally arrive at an enormous, concrete resort outside the city centre. We traipse gloomily up stairs, along glassed-in walkways and carpeted corridors with our exhausted five-year-old. Things can only get better.

They do. We wake to discover that Zadar, capital of the Dalmatian region, is a tiny, ancient, fortified city built on a narrow peninsula in the Adriatic, with parts of its Roman, 13th- and 16th-century walls still standing. Zadar boasts the remains of the largest Roman forum on the Adriatic coast, the oldest university in Croatia, founded in 1396, and the biggest cathedral in Dalmatia. Zadar also has its share of communist-era architecture, but these brutal towering eyesores seem only to accentuate the beauty of the older buildings and give the city its distinct flavour: nowhere have I seen such imaginative and irreverent use of ancient monuments and such a bold pairing of old with new.

A 5th-century earthquake destroyed most of Roman Zadar and the city was further devastated by the Allied bombardment (before it became part of Yugoslavia in 1945, Zadar was under Italian rule), so heavy that only three of the many magnificent seafront mansions remain. One is the Hotel Zagreb, where Alfred Hitchcock stayed in the 1960s and described looking out at the ‘most beautiful sunset in the world’. During the Yugoslavian war, Hotel Zagreb was home to refugees who destroyed its interior but there are plans to restore the hotel to its former elegance. As part of Zadar’s renaissance, there are also plans to convert the seafront Maraska factory into a hotel — it once made the maraschino liqueur from the sour cherries that Zadar is famous for.

Today’s Zadar is a phoenix, rising from its ashes and confident of its future as Europe’s next big tourist destination. Transformation is the name of the game: the 18th-century arsenal becomes a live music venue and shopping mall and a 13th-century fortress becomes the chic, boutique Bastion Hotel.

The resort where we stayed is owned by the unfortunately named Falkensteiner (locals jokingly call it Frankenstein), a privately owned Austrian company that gutted a tired communist-built hotel to provide cheap family entertainment on a huge scale with plenty of water sport, including a twisting, towering water slide. Austrian and German families flock here to take advantage of the all-in deal — you can eat and drink as much as you like. Once I recovered from the initial shock of the ugly architecture, the relentlessly cheerful colour schemes and the sheer scale of the place, I came to like the spacious, simple décor of our family suite complete with Japanese-style sliding doors and a balcony looking out to sea. Such is Falkensteiner’s optimism that a new, even more massive resort will open at nearby Punta Skala in July, with conference centre, apartments, two hotels and the largest spa area in Croatia. Recession doesn’t even seem to be a concept here, but developers’ optimism seems justifiable: since Ryanair began flying to Zadar two years ago, tourist arrivals are up a staggering 213 per cent.

‘There’s a freshness here that’s so energising,’ says the British music producer Nick Colgan. Jimmy Brown, drummer with British reggae group UB40, brought Nick to Zadar six years ago. Nick loved it so much that he moved here with his family and started the Garden Club, transforming a derelict garden that belonged to an abandoned hotel into Zadar’s first open-air lounge bar.

I meet Nick and Jimmy at the Garden the day before the summer Garden Festival opens with DJs and acts flying in from all over Europe. Jimmy is visiting with his family and Nick’s rushing around among piles of cushions and sofas making the Garden ready for its launch party. ‘It’s so laid back here you can never be sure,’ he jokes. The ‘boutique’ Garden Festival is such a success that there is now a sister festival in Petrcane, just outside the city, which will host 150 artists over two weekends in July and draw audiences of 2,000 a weekend. ‘Zadar’s like Ibiza used to be in the Seventies,’ says Jimmy. ‘It’s so exciting because it’s just at the beginning. And we’re drawing a really cool, global crowd that’s really putting Zadar on the international map.’ Nick has no regrets about moving from his native Birmingham. ‘I haven’t looked back. It just gets better. Is there anything I miss? Sometimes I could murder a curry.’ If Zadar’s resilient ability to transform itself so far is anything to go by, expect a curry house to open there soon.
Croatia Airlines flies from London Gatwick and Heathrow to Zadar (via Zagreb) from £153 return including taxes and charges. www.croatiaairlines.hr

A double room at the 4-star Funimation Borik starts from £52 per person per night on an all-inclusive basis including use of spa and taxes. www.falkensteiner.com/borik